I'm 57, and debt free. I own my home without a mortgage, have a decent car, and have about $300,000 invested (mostly mutual funds, but some CD's). I'm on a fixed income of $12,000/year, and manage to live on just that most months. I try very hard not to dip into principle. I'm doing "okay" on a tight budget, but would love to have more "fun money". I'm completely debt free.

Within the next few years, I'll be inheriting from my mom. I'm the sole heir, less some specific money to two other relatives - I will receive the considerable bulk of her estate which is about $3.5 million, plus a paid off house.

While I'm very good at saving/not spending, I'm not very good with knowing how to invest. That's why most of my money's in mutual funds, which are handled by a financial advisor. My mom uses a different financial advisor. I've met him, and I think he sounded more knowledgable than mine, but honestly I don't know how to tell. My mom is very financially savvy, which is how she managed to accumulate so much money (she's a depression baby, so started from "nothing").

I'm really hoping to learn more about how to manage my money now, before I inherit this vast sum, so that I know what to do with it when I get it. My goal is to be able to live off earnings from the money and never touch the principle - or even grow the principle. I would love to leave this money to the next generation if possible.

My inclination is to probably rent out the house I'll inherit. My mom thinks this would be a nice bit of income for me, better than I could get by selling the house and investing the proceeds. I suspect she's right about that, and it would be an ongoing income with little effort on my part.

I hope to live another 35-40 years, and need to keep up with and beat inflation, while keeping the money as "safe" as possible. It's all the money I'll ever have and I need to make it last!

So, hmmm, I know this is a really broad question, but where should I be looking to learn how to invest my current money, and become more comfortable with the idea of someday needing to manage millions. Some investments "sound" really good, but I don't know enough to decide what makes sense for me.

How much should I trust a financial advisor? Is there any benefit to using more than one and spreading things out? Do financial advisors "teach" their clients? I would love to have mom's spend some time teaching me about investing, but I don't know if that's a reasonable request, or what would be a reasonable amount to pay for that.

There's a part of me that feels like everyone's trying to "sell me something" to their own best benefit and not necessarily for my best benefit. I need to learn how to tell the difference and who to trust.

If you spend some time learning the basics, you should be in great shape to handle your financial future. Good luck!

Information is more valuable sold than used – Fischer Black

Tue Aug 09, 2016 1:22 pm

PubliusPreferred Member

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With that amount, you can get very good treatment at one of the no load management companies. I use Vanguard, but there are others. Once you reach a certain threshold at Vanguard (3.5 Million is plenty), you can get access to personal advice from a certified financial planner that you can build a relationship with. For no additional fee, they will put together a financial plan for you based on a couple of conversations. For a nominal management fee (compared to a lot of companies) they will also manage the accounts towards your goals. I believe it is 0.3% annually at Vanguard.

Tue Aug 09, 2016 2:13 pm

OyGeeBivNew Member

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Thank you for the recommendations, @Publius and @blixet. Bogelheads looks like a great place to start. I'll keep Vanguard in mind for when I actually have that money.

Tue Aug 09, 2016 8:37 pm

Paul@GFSNew Member

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quote: Some investments "sound" really good, but I don't know enough to decide what makes sense for me.

You may get in touch with a registered representative working under a brokerage firm regulated by the FINRA. You must discuss things only with an authorized representative.

Fri Nov 11, 2016 11:24 am

littleroc02usModerator

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A couple of things jump out at me. You state your yearly income is 12k. How are you getting by at that salary, that's below poverty level? Second, your 57, which although is still quite young and you could live another 40 years, but at that age you usually are starting to cut back the risk level in your life.
I must say I commend you for being debt free and mortgage free, most Americans can dream of achieving that level of success. As for the 3.5 million. Personally since you've explained to us that your not very good at investments, I would consult with a fee only financial planner who doesn't earn commissions based on the products they are trying to sell, but they are an advisor who you pay a fee to get advice and direction
Further more, since you'll have some financial freedom with 3.5 million, I'd start taking courses on investments so that you can educate yourself on what stocks, mutual funds, index funds and bonds are. Then I'd look into opening up a Vanguard account which is simple and putting your money into funds that track the S&P 500 and you split your risk between this type of fund and bonds. So 50/50. Take some risks and be more conservative with wealth preservation.

Good luck!

Risk comes from not knowing what you're doing. (Warren Buffet)

Fri Nov 11, 2016 2:21 pm

oldguySenior Member

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quote: How much should I trust a financial advisor? Is there any benefit to using more than one and spreading things out? Do financial advisors "teach" their clients?

I'm age 77, close to your mother's generation, I've experienced many of the things that she has. My advice (BEFORE you listen to advisors or make decisions) is to read 'The Little Book of Common Sense Investing". It costs about $15 on Amazon. It is written by John Bogel, the founder of Vanguard Funds. As I read it, I realized that it follows almost the same investing methods that I used to I become wealthy over the past 35 years.
The book summarizes investing, wealth building, explains it simply, and tells you exactly what to do.

Fri Nov 11, 2016 3:44 pm

ken-do-nimFull Member

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Also, kudos to you for recognizing that a big windfall like that needs careful management. I have every confidence that you will do the right thing with that money and not spend it down too quickly.

Mon Nov 14, 2016 8:10 pm

Paul@GFSNew Member

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Ans: Yes, "The Little Book of Common Sense Investing" has been a pretty good thing for reading. You'll gain an insight into the investing process.Earning money often proves to be tough, so it has to be spent wisely. It's nice to read a few good books on investing.